Oil has steadily climbed today, though not enough to recoup the losses on Tuesday and Wednesday.
WTI crude is up $1.60 to $57.60, which is a nearly 3% gain and comes after yesterday’s decline to the lowest since December 17 and a threat of the five-year low set in December.
It’s been a lively week in the crude market after the US kidnapped Venezuelan President Maduro. The fear initially was that would lead to turmoil but it appears to be mostly calm, at least for now.
However the relatively painless operation may have emboldened US plans elsewhere, with Trump today talking about Cuba and also warning about US retaliation if Iranian protesters are killed.
As for Iran, the internet was evidently cut off in parts of the country today as protests spread. That’s often a sign that the state is losing control.
Unlike Venezuela, Iran is still a exporting around 2 million barrels per day and producing 3.2-3.5 million barrels per day. That’s much more material in the global market than the 0.5m bpd from Venezuela. It’s also in a part of the world that can get tumultuous quickly.
China may also be seeing what happened in Venezuela and be looking to stockpile more crude, or secure alternative supplies.
On Wednesday, the US seized two Venezuela-linked oil tankers, including one that was flying a Russian flag. The market may also be re-thinking timelines on additional Venezuelan oil. US Treasury Secretary Scott Bessent today said they could add 0.5mbpd by the end of this year but anything much beyond that is going to take large amounts of investment and political certainty.
In terms of inventories, US data yesterday showed very large product builds and that gnaws at worries about oversupply this winter
